Correlation Between American Axle and FDG Electric
Can any of the company-specific risk be diversified away by investing in both American Axle and FDG Electric at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining American Axle and FDG Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Axle Manufacturing and FDG Electric Vehicles, you can compare the effects of market volatilities on American Axle and FDG Electric and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in American Axle with a short position of FDG Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Axle and FDG Electric.
Diversification Opportunities for American Axle and FDG Electric
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between American and FDG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding American Axle Manufacturing and FDG Electric Vehicles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDG Electric Vehicles and American Axle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on American Axle Manufacturing are associated (or correlated) with FDG Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDG Electric Vehicles has no effect on the direction of American Axle i.e., American Axle and FDG Electric go up and down completely randomly.
Pair Corralation between American Axle and FDG Electric
If you would invest 604.00 in American Axle Manufacturing on August 24, 2024 and sell it today you would earn a total of 54.00 from holding American Axle Manufacturing or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
American Axle Manufacturing vs. FDG Electric Vehicles
Performance |
| Timeline |
| American Axle Manufa |
| FDG Electric Vehicles |
American Axle and FDG Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Axle and FDG Electric
The main advantage of trading using opposite American Axle and FDG Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Axle position performs unexpectedly, FDG Electric can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FDG Electric will offset losses from the drop in FDG Electric's long position.| American Axle vs. Gentex | American Axle vs. Fox Factory Holding | American Axle vs. Dana Inc | American Axle vs. Lear Corporation |
| FDG Electric vs. Summit Materials | FDG Electric vs. KeyCorp | FDG Electric vs. NioCorp Developments Ltd | FDG Electric vs. Juniata Valley Financial |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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